Search This Blog

Could the devastation in the DRAM industry lead to a resurgence?

We have written here before on the problems in the semiconductor sector and especially among manufacturers of memory chips.

IC Insights has come out with a report that contends that the stage is set for strong growth in DRAM.

The way the industry is shrinking could actually be a positive. Several DRAM vendors, including Micron, are eliminating their 200mm wafer fab capacity. Qimonda and possibly other DRAM vendors are filing for bankruptcy. The Taiwanese government is consolidating and bailing out a group of their DRAM manufacturers.

What is the outcome of all this destruction and devastation? IC Insights thinks that DRAM supplies will tighten and more closely align with demand as the year progresses.

This sounds good but even if this positive scenario does play out as expected, DRAM sales for 2009 will still be 12% lower than in 2008. And keep in mind that 2008 finished on a low note.

IC Insights believes that the first quarter of 2009 will be the bottom for the DRAM industry. I can see how the reduction in worldwide production capacity can help stabilize chip prices but I find it difficult to accept that demand will increase sufficiently to make the numbers illustrated in the chart above. IC Insights points to strong increases in spot prices for some versions of 512Mb and 1Gb DRAM chips since the beginning of 2009 as reason to believe these sales numbers could actually come to pass.

With DRAM sales driven mostly by consumer electronics demand and general PC demand, though, it still seems that expectations for a rebound in the DRAM industry this soon is a stretch. On the other hand, IC Insights contention that the bottom is 1Q2009 may not be too far off the mark. So how do you feel about timing the bottom, even for just one sector?

Comments

Post a Comment

Popular posts from this blog

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments --

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:

Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:

Results here were actually quite good and, to make things even better, the previous month was revised upward.

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, TradingStockAlerts.com and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at Trade-Radar.com

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Version 7.0 of the TradeRadar software is now available on the Download page. Great improvements in usability and configurability - supports more investing styles, looks even better, runs faster, charts integrated into both main screen and Watch List reports. Significant automation has been added to make it easier than ever to use.